Author: Li Jiahui
SINGAPORE, 6 February (ANI): Singapore has grown tremendously as a wealth management hub in recent years. After the country eased COVID restrictions, it has emerged as Asia’s leading country thanks to its tax-friendly regime and relative safety, seeing a new wave of wealthy foreigners looking to park their wealth here.
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Assets under management more than tripled from S$1.6 trillion (US$1.2 trillion) to S$5.4 trillion in the decade from 2012 to 2021, according to Singapore’s central bank, MAS (Monetary Authority of Singapore).
In just one year, in 2021, it has grown by 16%, last year for which data is available.
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Three-quarters of these are from outside Singapore, and just under a third are from Asia-Pacific countries. In fact, some call Singapore the Switzerland of the East.
Recently, the trend of setting up family offices has been growing and accelerating since the start of the pandemic, and Singapore has also managed to capture a large portion of this market. Family offices are privately held companies set up by the ultra-rich to manage their wealth and investments.
These family offices are often set up to meet the financial and investment needs of wealthy families or individuals, including providing financial solutions, budgeting, insurance, charitable giving, wealth transfer and succession planning, and tax services.
Family offices differ from traditional wealth management because they provide a holistic solution to manage the financial and investment needs of an affluent individual or family.
From 2020 to 2021, the number of Singapore family offices set up in the city-state climbed from 400 to 700. Data for 2022 is not yet available, but anecdotal evidence suggests the trend continues to grow.
Zhong Tinghui, a lawyer who helped set up the family office, told Reuters that he would receive an inquiry every week through the end of 2022, hoping to transfer at least US$20 million to Singapore. That’s up from about one inquiry a month in 2021, and in January, he received two inquiries a week.
Last October, Bloomberg reported that Indian billionaire Mukesh Ambani, who ranks 10th on the 2022 Forbes Billionaires list, is setting up a family office in Singapore. The office will be set up by the billionaire’s company, Reliance Industries.
It is believed that opening a family office in Singapore will help Ambani achieve his larger goal of globalizing his retail-to-refining operations. It will also help him buy assets abroad.
He’s in great company. The super-rich, including hedge fund billionaire Ray Dalio and Google co-founder Sergey Brin, have chosen to set up their family offices in Singapore. British inventor James Dyson is famous for his bladeless fans, hair dryers and vacuum cleaners, as is Zhang Yong, founder of the Chinese Haidilao hotpot restaurant chain.
This is especially true among the Chinese, who are disenchanted with the government’s draconian COVID policies.
These mainlanders have grown impatient and are keen to find other destinations for their fortunes. Although China has now abandoned its zero-COVID policy, these wealthy Chinese are expected to continue exploring options outside their home country, also in part because of concerns about the shared prosperity drive of President Xi Jinping aimed at reducing inequality.
Apart from Chinese, Malaysian and Japanese citizens also want to set up family offices in Singapore.
What attracts ultra-wealthy foreigners to set up family offices in Singapore is its tax-friendly regime and relative safety and security. It is also seen as politically stable, with clear and transparent rules and a clean system.
Singapore is also an international financial center, which enables investment firms to offer their clients a variety of products and investment opportunities to suit their needs.
After many expatriates left at the height of the pandemic, the arrival of wealthy individuals has led to Singapore’s resident population growing again. In 2022, there will be 30,000 new permanent residents on the island, 97,000 new foreigners holding work or long-term visas, and the population will increase to 5.64 million.
However, the influx of the global wealthy to the tiny island has caused some misery for the local residents. Prices of cars, homes and other goods rose sharply. Deputy Prime Minister Lawrence Wong said in August last year that the wealthy could face more taxes to promote inclusive growth.
Rents for new Singapore residents soared 21% in the first nine months of last year. Home prices have also risen sharply over the past two years, with mainland Chinese buyers continuing to be the largest foreign buyers of expensive private property.
The dramatic increase in golf memberships is just one sign of how prices for the island’s symbol of affluence have gone insane.
Foreigner membership fees at Singapore’s prestigious Sentosa Golf Club have more than doubled since 2019 to S$880,000 (US$665,000), according to membership brokerage Singolf Services.
Desmond Teo, Asia-Pacific family business leader at consultancy Ernst & Young, told Reuters the inflow of capital supports Singapore’s financial services sector and start-ups, creating a “rich ecosystem” and making the country more attractive to new stakeholders. force.
“When you reach a certain critical mass, the critical mass itself is an attraction,” he said. (Arnie)
(This is an unedited and auto-generated story from a Syndicated News feed, the content body may not have been modified or edited by LatestLY staff)